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All Things Crosschain - Solving Liquidity Fragmentation with Wormhole, Circle and Beefy

February 7, 2024

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It may seem like ancient history now, but it wasn’t so long ago that we weren’t able to travel anywhere, access everything and live life without borders. Constrained by our physical capabilities, our man-made tooling and the enormity of the planet, most of mankind accepted that our world was necessarily fragmented. It took thousands of entrepreneurs and millions of innovations to slowly push the limits of where we could go and what we could access before we finally arrived at our modern age of mass distribution.

Today, Web 3.0 exists like those historical civilizations - fragmented into hundreds of small chains defined by their own limitations. And like the globalization of our world, Web 3.0 is destined to break down our crosschain barriers and unlock a more perfect distribution system. But to do it, we’re also going to need thousands of entrepreneurs and millions of innovations. Only then can we hope to arrive at all things crosschain.

We at Beefy are proud to be among the thousands of entrepreneurs and partners working tirelessly to let a million innovations bloom. And today, we’re excited to be playing our part in someone else’s mission, as we help our friends at Wormhole and Circle to solve liquidity fragmentation issues at the heart of the Arbitrum ecosystem.

Wormhole

For those not familiar, Wormhole is one of the largest bridging service providers by volume across all of DeFi. Wormhole’s technology connects dozens of blockchains with tried and tested crosschain messaging and asset bridging services. It also supports an entire ecosystem of decentralization applications and services that help keep Web 3.0 thriving each and every day.

Wormhole’s suite of solutions rely on a large offchain network of “guardians” to process requests and messages from all of its supported chains. Guardians serve to validate and finalize requests before transmitting messages to an offchain relayer, which in turn relays the message to the chosen destination chain. The whole process is fast, low-cost and seamless, pathing the way for limitless interactions across Web 3.0.

But Wormhole’s work is far from done, and the team are shipping new products constantly. For instance, the latest service - Wormhole Queries - now extends the existing guardians network to provide crosschain attestation of information (i.e. confirming its validity), extending the scope of what’s possible between different blockchains. The team also recently announced their zero-knowledge roadmap, which they expect will deliver stronger trust, greater composability and growing permissionlessness across their products.

Circle CCTP

Another exciting development in the Wormhole ecosystem is their flourishing partnership with Circle - the issuer of the $USDC stablecoin. The circulating supply of Circle’s products has grown exponentially over the last few years, providing millions of users with access to reliable, stable onchain assets with which to do business. And the ubiquity of tokens like $USDC across dozens of blockchains has been a key driver of crosschain interoperability.

To help the proliferation of Circle’s assets, Wormhole has incorporated the Circle cross-chain transfer protocol (CCTP) into it’s Wormhole Connect service. Connect is a simple and easy-to-use widget that can be incorporated into any decentralized applications in as few as 3 lines of code. By offering not only Wormhole’s own bridging options but third-party applications like CCTP as well, Connect is another way that Wormhole is helping to bring down the barriers between chains.

CCTP is a lightning-fast service which covers 6 core EVM blockchains at the time of writing. It allows users to transfer their native $USDC tokens securely and at minimal cost, and with Circle’s assurance. As more and more native forms of $USDC are entering circulation on different chains, CCTP is setting the standard for stablecoin management across the industry. And together with Wormhole, this exciting new technology is helping to solve longstanding challenges in various ecosystems.

Let 100 Million Stables Bloom

More specifically, Wormhole, Circle and Beefy are taking aim at $USDC liquidity fragmentation on the Arbitrum network. As the native $USDC on Arbitrum was introduced in the last few months, the majority of Arbitrum’s history has involved the non-native $USDC token - $USDC.e. Though the two versions have effectively the same value, only the native version has access to the full breadth of services Circle has to offer, including CCIP.

To support its efforts, Wormhole was a significant recipient in the recent Arbitrum Short Term Incentives Program (STIP). Their mission outline aims for the importation of 100 million $USDC into the Arbitrum ecosystem over the next few months by providing a competitive interest rate for new native stablecoins arriving on the chain. In doing so, it seeks to provide a viable alternative to other leading stablecoin interest offerings, such as MakerDAO’s $sDAI and Coinbase’s custodially-held $USDC. And we at Beefy are proud to be playing our role.

The Wormhole application was allocated an enormous 8 million $ARB token STIP incentives, with a market value of around $3 million up for grabs. Accessing your share of these sweet rewards is pretty simple, you just need to follow a few steps:

  • mint new native $USDC on Arbitrum using the Portal USDC Bridge, with CCTP via Wormhole Connect; or
  • bridge existing $USDC.e out of Arbitrum, and bridge back into native $USDC again with CCTP via Wormhole Connect; and then
  • hold your native $USDC on Arbitrum either on its own or staked into Aave, Compound or Beefy.

More specifically, our Compound $USDC Beefy vault offers you the best of all worlds, with $ARB interest on your deposited stablecoins, Compound rewards for liquidity providers and then additional compounded returns as Beefy reinvests your rewards for you. Beefy’s web app also make it even easier for you to participate by hosting an interface for the Portal USDC Bridge directly on the vault page. Just hit “Bridge USDC via Wormhole”, connect your wallet and select the chains you want to bridge your $USDC between. Easy!

Once your $USDC is in place, head over to the Rewards Dashboard to check the amount of qualifying $USDC you've bridged and the current $ARB rewards you've accrued. Then simply wait for the weekly distribution of $ARB rewards directly to your Arbitrum wallet. And now give yourself a pat on the back for helping to end stable liquidity fragmentation on Arbitrum. 👏

All Things Crosschain

As one of the original and most prolific crosschain projects in DeFi, Beefy knows all too well the struggles of fractured liquidity from legacy operations. That’s why we’re thrilled to be playing our part in Wormhole’s mission to restore the balance of $USDC on Arbitrum. Their plan reflects the very best in targeted ecosystem development, and demonstrates the power of all things crosschain.

Ultimately, we know it’s going to take millions of incremental innovations by thousands of entrepreneurs to gradually bring down the barriers that fragment the wider Web 3.0 world. But each small step brings us one closer to a truly globalized world of decentralized finance. Pioneers like Wormhole are leading the way, and we at Beefy are proud to join them.

Now it’s your turn… 🌉

STIP Outline | Portal USDC Bridge | Rewards Dashboard | Incentivized Beefy Vault

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